First Berlin Equity Research has published a research update on ad pepper media International N.V. (ISIN: NL0000238145). Analyst Dr. Karsten von Blumenthal reiterated his BUY rating and increased the price target from EUR 2.80 to EUR 2.90.

ad pepper media’s (APM) annual report confirms preliminary sales and EBITDA. In 2023, management faced the challenge of a second year in a row of declining revenue (-13% y/y) and profitability. EBITDA was only break-even versus €1.3m in 2022. APM adjusted its cost base in 2023, reducing personnel expenses by €1.1m. Despite the difficult environment, APM made an important strategic step forward and purchased a 26% stake in solute, an operator of price comparison portals. APM management has not yet reached its target of purchasing a majority stake, but we believe that this will happen this year and create a much stronger company. APM’s 2024 outlook remains cautious, but it sees first signs of rising ad demand. We forecast a gradual macro-economic improvement in APM’s key UK and Germany markets and remain optimistic that company growth (on a standalone basis without consolidating solute) will resume (+5% y/y). Cost savings and operating leverage should result in an EBITDA rebound to ca. €1.1m. Preliminary Q1 EBITDA of €221k (Q1/23: €-328k) supports our positive view. We confirm our Buy rating and raise the price target to €2.90 (previously: €2.80).